Why companies aren’t buying more podcast ads

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Today, we’re mixing it up a bit. First off, I have a post-Podcast Upfronts Q&A I conducted with SiriusXM’s Lizzie Widhelm and Scott Walker. Both Widhelm and Walker are a part of SXM Media, the massive ads operation that powers SiriusXM, Pandora, SoundCloud (through a partnership), and the SiriusXM Podcast Network (which includes in-house studios like Team Coco and partners like Crooked Media). 

Following that, I’ll have some more news on Crooked Media’s new subscription offering, an extremely podcast-inspired Peacock show, as well as some key moves and announcements. 

Widhelm and Walker gave me a chance to pick their brains about podcast ads — as well as what makes companies shy away from them. The main thing on my mind: despite its rapid growth, podcast ad revenue makes up a very tiny percentage of the total digital ad spend in the United States. Podcast ad revenue in the US reached $1.8 billion for the first time last year, out of $209.7 billion total digital ad spend. The two execs helped to shed some light on what it’ll take to close that gap.

Widhelm is currently the senior vice president of B2B marketing and ad innovation, while Walker serves as senior vice president of ad platform for both SXM Media and AdsWizz. Here is a lightly edited transcript of our conversation. 

This year’s soft ad market is a challenge for media, tech, and many industries — but podcast ad revenue is still growing. But as was mentioned several times (…during Podcast Upfronts), it’s still not on pace with listenership. Why exactly is that? 

Lizzie Widhelm: The amount of spend does not correlate to the amount of audience, but it is picking up. I spoke a little bit to this off-the-cuff during our feature at the Upfronts. It’s not always been easy to buy podcasting, transacting across a bunch of partners and a bunch of shows. We’ve been hard at work building ad tech to allow for direct sale transactions and programmatic transactions. And we’re leading — so if we’re leading, everyone else, you know, is still behind us. One thing is just the transaction and how fast you can do it. Podcasting is still maturing there. 

The other piece of it is just marketers having to take a pause. It is a different format. It’s a more authentic connection to the audience. None of it is prerecorded, like a song that you hear over and over again. A show is unique, so in regards to how an advertiser fits in that space — they’re just thinking a little bit harder about how they do that and in a way that benefits the listener experience. That kind of comes back to the creative consultation […for podcast ads]. So I see it a little differently. I think we will see really strong numbers in the space, but it’s just maturing a little bit slower because everyone’s trying to be very intentional about how they invest here. 

We like the trend where marketers are moving from only show-level ad buys into groups of shows they’re buying programmatically. They’re more comfortable with creative formats and going beyond host-read podcast ads. I’m bullish on the trend […of podcast ad revenue] continuing to show increases. 

But advertisers would really need to start spending if they are ever going to catch up to audience size. 

When you compare ad revenue for podcasts to standard radio, what have you noticed? 

LW: Oh, they’re like night and day. I don’t know where I would start. I would compare podcasting almost more to branded entertainment. Sometimes it’s similar to what we grew up with, like the product placement in movies. It’s so much deeper of a connection. The CPMs are higher, the ad links can be more variable. Maybe the only thing they have in common is sometimes you’ll have both a disc jockey and podcaster both reading ad copy. 

But the leaned-in nature of some of these […podcast shows] — you take Ashley Flowers, for example, and her audience and how obsessed they’ll be about a one-hour show, and how leaned-in they are. They’re not just channel surfing. It’s just a totally different intent behind why someone is listening. The audience and the audience experience are so far from terrestrial radio that I have trouble drawing too many parallels between the two. 

Scott Walker: Just think about the differences in distribution mechanism, right? A broadcast that is “one-to-many” means you have to create programming that appeals to the largest amount of people possible, right? And in podcasting, one-to-one delivery means being able to interact directly with the consumer and having them choose what they want to go deeper into. It allows you an infinite amount of time, theoretically, to go deeper into a kind of topic and go much more niche in terms of where you focus your energy as a creator. 

The ad load is fundamentally different. There is a lot more clutter and a lot more ads per hour on broadcast radio compared to podcasting. The technology and measurement and what you can do from an advertiser perspective — to really understand how to find your audience, reach them effectively, measure, refine and optimize your ad campaigns. To Lizzie’s point, night and day. 

I know it’s very early days, but in regards to the writer’s strike that’s happening — it’s possible that it will prevent many advertisers from making long-term ad deals with TV networks. Do you anticipate that some of these companies will turn to podcast ads as an alternative? 

LW: I have not had anything come up this week. I mean, it’ll be interesting to see how that plays out and how long the strike lasts for, sure. But nothing we could confirm in terms of that trend actually taking hold. 

An analyst during SiriusXM’s last earnings call asked about Tucker Carlson and Don Lemon and why they would choose to host a show rather than go to linear TV. But from your point of view, from an ad seller’s perspective: do advertisers shy away from overly political or controversial content? 

LW: I would say all advertisers have preferences. A year ago, we rolled out targeting and a vast array of solutions that let brands target the content that makes sense for them. As an advertiser, we’re in the position that you can like what you like. We’re just going to help you find the audience that matters to you. 

We’ll have the rest of the Q&A with SiriusXM in Thursday’s subscriber-only issue of Hot Pod Insider.

A TV show about a fictional true-crime podcast show can work, as Only Murders in the Building proved. Now, it’s well on its way to becoming its own subgenre. Based on a True Story, a new series by Peacock, tells the story of a financially struggling couple who start a podcast in order to nab a local serial killer. The series stars Kaley Cuoco and Chris Messina as married couple Ava and Nathan Bartlett. A trailer for the show dropped today, and you can view it here. 

Video platform Rumble (a right-wing alternative to YouTube) announced it has acquired Callin, a live audio app with publishing capabilities. Rumble already publishes podcasts and has a separate podcast category on its site (it signed its first multiyear podcast deal with Donald Trump Jr. earlier this year). Rumble’s acquisition of Callin — which allows amateur users to livestream audio or video and record these conservations to publish as podcasts — seems to be a way to draw in more users. First launched in 2021 by co-founders David Sacks (a co-founder of Yammer and former COO of PayPal) and Axel Ericsson, Callin was a part of a wave of social audio apps like Clubhouse and Twitter Spaces that emerged during the pandemic. 

Rumble did not disclose the terms of the deal. 

Crooked Media debuted a subscription plan for its listeners today, offering its most devoted fans extra perks and content in exchange for a fee. The three tiers will be priced at $6.99, $9.99, and $19.99 per month, respectively. Depending on the tier, subscribers will gain access to early episodes, bonus content, Discord groups (which is a thriving online community for fans of indie podcasts), swag, and other benefits. 

Subscriptions are still a relatively new tactic for podcasts, which remain heavily reliant on ad revenue. Wondery, Slate, Pushkin, Stitcher, and many other companies have launched premium programs in recent years. Some podcast listeners (though they’re still in the minority) are willing to pay a premium for perks like ad-free or bonus episodes — so it’s wise for Crooked Media to tap into this audience.

Alison Craiglow (formerly lead executive producer of Freakonomics Radio Network) is joining Fresh Produce as executive producer. Craiglow is EPing for Audible’s In the Room with Peter Bergen, the first episode of which is being published today. 

Candice Lim (formerly of NPR’s Pop Culture Happy Hour) is joining Slate as the new co-host of internet culture podcast ICYMI. Lim’s first day was yesterday, and her first episode with co-host Rachelle Hampton will air later this week. 

Acast is launching a contest for small businesses called “Pod Power-up” that gives companies a chance to win a $10,000 podcast ad campaign via Acast’s self-service platform. Applications are now live. 

Former Spotify exec Teresa Elliott has joined Ad Results Media as its chief revenue officer. ARM’s co-chief executive officer Steven Shanks writes: “With her extensive experience in the audio industry, forward-thinking outlook, and an impressive record of delivering insight-led solutions, Teresa brings distinctive expertise that matches our commitment to industry leadership.”

The Podcast Show London is returning for its second year on May 24th and 25th, with two days of programming and a huge lineup of speakers including iHeartPodcasts President Will Pearson, Acast CEO Ross Adams, and Sex Actually’s Alice Levine. If you’re interested in attending, we’ve partnered with the team over there to get you all a discount: follow this link and use code “HOTPOD” at checkout for 10 percent off standard one- and two-day passes. You can also grab Preview Night tickets to see Crime Junkie’s Ashley Flowers be awarded their inaugural International Podcast Trailblazer Award and join in for networking and drinks.

That’s all I have for you today, gang. See you on Thursday for our Insider edition of Hot Pod.